Can the IRS take my retirement pension?
Matthew Harrington
Updated on January 25, 2026
The general answer is no, a creditor cannot seize or garnish your 401(k) assets. 401(k) plans are governed by a federal law known as ERISA (Employee Retirement Income Security Act of 1974). One exception is federal tax liens; the IRS can attach your 401(k) assets if you fail to pay taxes owed.
Are federal taxes taken out of military retirement pay?
Military retirement pay based on age or length of service is considered taxable income for Federal income taxes. However, military disability retirement pay and Veterans’ benefits, including service-connected disability pension payments, may be partially or fully excluded from taxable income.
What taxes are taken out of military retirement pay?
1. California California offers retired military members no way to escape its high tax rates. The Golden State taxes 100% of a resident’s income from military pensions, along with private, local, state, and other federal pensions.
Can retirement pay be garnished?
The U.S. Treasury can garnish your Social Security benefits for unpaid debts such as back taxes, child or spousal support, or a federal student loan that’s in default. If you owe money to the IRS, a court order is not required to garnish your benefits.
Can IRS garnish my Social Security check?
Because the FPLP is used to satisfy tax debts, the IRS may levy your Social Security benefits regardless of the amount. This is different from the 1996 Debt Collection Improvement Act which states that the first $750 of monthly Social Security benefits is off limits to satisfy non-tax debts.
How do I stop the IRS from garnishing my Social Security?
Tax Resolution Options to Stop the IRS from Garnishing Social Security or to Release the Levy
- Ignore the Notice.
- Pay the back taxes.
- File an appeal.
- Negotiate a payment plan or submit an Offer-In-Compromise.
- Apply for non-collectible status.
- File bankruptcy.
What states do not tax your military retirement?
The following states don’t require military members to pay state income tax on military retirement pay because there is simply no state income tax collected:
- Alaska.
- Florida.
- Nevada.
- New Hampshire (dividend and interest taxes only)
- South Dakota.
- Tennessee (dividend and interest taxes only but will be phased out in 2021)
Does military retirement pay count as income for Social Security?
Earnings for active duty military service or active duty training have been covered under Social Security since 1957. You can get both Social Security benefits and military retirement. Generally, there is no reduction of Social Security benefits because of your military retirement benefits.
How long does military retirement pay last?
20 years
Active duty military members can retire after 20 years of active duty service. In exchange, they receive retirement pay for life.
Can a retirement account be garnished in the military?
If the retirement pay is combined with other funds, that account will be subject for garnishment. However, if all retirement pay is in a separate account and marked as exempt, the funds cannot be garnished. Being in the military can be stressful.
Is the military pay exempt from wage garnishment?
Military retirement pay is exempt from wage garnishment for most debts owed to private companies such as collection agencies, hospitals and credit card companies.
Can a retired federal employee be garnished by the IRS?
The Federal Payment Levy Program lets the IRS garnish the pay of federal employees and retirees when those taxpayers neglect or refuse to pay a balance due on taxes, after a process that includes sending the taxpayer a series of notices. Last year, the IRS expanded that program to include military retired pay.
What’s the difference between retirement and active duty garnishment?
That is the major difference between active duty garnishment and retirement pay garnishment. Under the Uniformed Services Former Spouses’ Protection Act (USFSPA), child support, spousal support, or a property division are allowable if a court chooses to garnish retirement pay for those requirements.
